Friday, July 5, 2013

Friday, 5th July 2013. Palm oil futures manage to recover above its one week high at 2,374 yesterday, signifying temporary Short covering positions for the moment. Other news to follow.

"- U.S market was closed for 4th July holiday, will resume trading today.""-Hong Kong stocks rebounded Thursday after upbeat economic data provided a lift to stocks on Wall Street, with the energy, banking and property sectors leading the recovery after the previous day's sell-off. The Hang Seng Index HK:HSI+1.60% rose 1% after tumbling 2.5% in the previous session, while the Hang Seng China Enterprises Index added 0.8%. Shares of China Petroleum & Chemical Corp.HK:386+2.54%SNP-1.09% rose 2.7% and Cnooc Ltd. HK:883+2.07%CEO-0.95% gained 1.4%, while heavyweight HSBC Holdings PLC HK:5+1.57%HBC-0.72% added 1.3%. Mainland Chinese shares dropped, however, amid lingering economic worries. The Shanghai Composite CN:SHCOMP+0.59% shed 0.8% to 1,977.45.""-Oil futures settled above $101 a barrel Wednesday, as concerns about the Middle East oil trade intensified in the wake of political turmoil in Egypt and after a U.S. report showed a much bigger-than-expected drop in last week’s crude supplies. Crude for August delivery CLQ3-0.04% settled at $101.24 a barrel on the New York Mercantile Exchange, up $1.64, or 1.7%. It touched highs above $102.""-August Soybeans finished up 7 3/4 at 1441 1/4, 8 3/4 off the high and 8 1/2 up from the low. November Soybeans closed up 8 1/4 at 1250 3/4. This was 9 up from the low and 9 off the high. August Soymeal closed down 0.3 at 432.6. This was 0.5 up from the low and 4.7 off the high. August Soybean Oil finished up 0.28 at 47.11, 0.11 off the high and 0.39 up from the low. Old vs. new crop calendar spreads were well supported throughout the session due to profitable cash crush margins across the Midwest and steady meal demand in the domestic market. Export demand inquiries have backed off as Argentina supplies hit the market but the tight supply situation in the US is helping to offset. Weather continues to be a wild card with reports of soybean growth that is well behind normal in the northwestern tier of the growing region. Weather conditions remain favorable for the remainder of this week and into this weekend with showers showing up in the Eastern Corn Belt while the west will trend drier. Temperatures will moderate in the mid-80s the rest of this week before heating back up into the weekend and next week. Many traders are beginning to focus their attention on the mid-July forecast that shows more severe temperatures in the western Corn Belt. Rainfall will be needed across the region next week. Basis levels in the interior of the US held steady today but remain at historically high levels with physical traders noting that it was becoming increasingly difficult to source supplies. Many crushers only have 2 weeks of coverage at this point. A private grains analyst estimated US production at 3.376 billion bushels, down slightly from their prior forecast and down from the most recent USDA estimate of 3.39 billion. The estimated yield was 43.9 bushels per acre as compared with the USDA forecast of 44.5 bushels per acre."

FCPO- Pending Recovery

The benchmark Sept manage to breached above previous week high around 2,374 level, marking the first attempt by the Buyers to revive Bullish trend. Much of the rally was supported by lower stockpiles expectation and steady increase on demand side. Official palm oil data will be announce this coming 10th July by MPOB and cargo surveyors. Judging by recent positive candle formation after the first higher high and higher low was formed yesterday, traders are expecting further Bullish price momentum to continue today. Unfortunately, yesterday partial rallies might be halted due to less trading participation due to U.S market independence holiday. CME will resume trading as usual by today 5th July 2013. Volume was also reported 25% lower yesterday. That explain why the price dropped back to 2,371 yesterday as Long holders booked their profit before the closing bell. Range play will be the head lines today where 2,362 will be the first support level followed by 2,355 second support level. Upside is pegged at 2,391 for the moment.

Daily Pivot Point
R2= 2391
R1= 2380
S1= 2362
S2= 2355

Disclaimer: Information and opinions contained in this report are for educational purposes only. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness.